For much of the past two years, aluminium was the metal everyone loved to hate. While copper, the darling of hedge funds, has raced to one record after another, hitting $10,000 a tonne last week for the first time, aluminium, the most widely used metal after steel, lagged far behind.

As Klaus Kleinfeld, chief executive of Alcoa, the US aluminium producer, said recently: "Whenever I go around, people are saying, my God, wouldn't it be great if aluminium would be like copper?"

Such disparaging words may be a thing of the past. The lightweight metal, used in consumer and industrial products from cars and aircraft to drinks cans, has recently been winning favour in the metals community. Strategists at RBS have made it their top pick for 2011, while Macquarie, Barclays Capital and Deutsche Bank have also turned bullish.

Investors are beginning to take note. Hedge funds have begun to unwind one of last year's most popular trades - that copper would outperform aluminium - by buying aluminium and selling copper. That helped push the benchmark aluminium contract above $2,500 a tonne for the first time since September 2008: on Wednesday it hit a two-year high of $2,575.25.

Unlike copper, however, aluminium remains a long way from its peak of the last cycle, $3,380 in July 2008. Indeed, copper is now nearly four times as expensive as aluminium - the highest such ratio on record.

That alone is one reason some believe aluminium could rally. "Aluminium is set to play catch up and redress the imbalance," says Nick Moore, head of commodity strategy at RBS.

Energy factor

Producing aluminium requires so much energy some traders joke the metal is "congealed electricity". On average it takes about 15.7 kilowatt hours of power to make one kilogram of aluminium from alumina, an intermediate compound, meaning electricity accounts for about 40 per cent of production costs.

For that reason, some bulls argue, aluminium prices are set to rise sharply in the long term as energy costs rise. The current supply curbs in China, they say, are a glimpse of what the market has in store.

David Fuller's view Aluminium (monthly, weekly & daily) is more affected by high levels of scrap than other industrial metals due to its usage in soft drinks cans and the speed with which these are often recycled. This can cause the price of aluminium to underperform other metals during periods of economic expansion.

However the production of aluminium is very energy intensive, as mentioned in the article above. Therefore production may be curtailed in some countries when energy costs rise.

The prices may be a mild headwind for aluminium production today but with LME stocks high, this market is likely to require increased speculative interest to outperform in a generally strong sector.